6 Things Everyone Needs to Know to Reduce Health Insurance Liens in Florida
Health insurance liens attach to settlement proceeds when your health insurance pays for treatment needed due to a personal injury and you receive a settlement. It's almost always better for the injured plaintiff to allow their health insurance to pay for their accident-related treatment, learn more here.
Most health insurance plans have language in their policy that entitles them to claim a health insurance lien. If lien language is in your health insurance policy, you would have agreed to reimbursement when you signed the policy. Most people are not aware of the legal effects of the policy language. They only become aware of the health insurance lien after an injury. If you have to deal with a health insurance lien, there are a few things you should know.
Which laws apply to your insurance lien?
The first thing to determine is what law applies. Health insurance policies written in Florida are governed by the plan’s terms and Florida Statutes.
The six things you should know when you find yourself injured because of the negligence of others, and end up with a health insurance lien in Florida:
1. Read Your Health Insurance Policy to Determine If There Is a Health Insurance Lien
First, your health insurance policy is a contract. Contracts are based on the terms of the agreement; it is not safe to assume that your health insurance company has a health insurance lien. We have seen insurance companies claim to have a health insurance lien even when the health insurance policy did not provide for that right.
Read your policy or share it with your attorney to confirm the policy authorizes a health insurance lien. The policy language will outline exactly what, if any, health insurance lien your health insurance has on settlement proceeds. Keep in mind some policies only apply to third-party settlements and not to uninsured or underinsured motorist settlements.
2. Your Health Insurance Company May Only Recover Payments for Medical Care Related to Your Claim
Your health insurance company has a right of recovery for the payment of medical care; keep in mind, they only have a lien for payments related to your injuries. Your attorney should confirm the lien is only for the bills related to your injury claim.
The first step to confirming this is to request an itemized lien from the insurance company which lists all of the payments they are seeking to recover. Your attorney should notify the insurance carrier immediately if any of the listed payments are unrelated to your claim.
3. Health Insurance Companies Must Take into Account Attorneys’ Fees and Costs When Determining Health Insurance Liens
Most personal injury attorneys work on a contingency fee basis. This means that their payment is contingent upon their client obtaining a monetary settlement. In these cases, the attorneys’ fee is a percentage of the client’s recovery. In addition to the fee, the client must reimburse the attorney for costs incurred during the case.
Florida Statute 768.76(4) limits lienholders right of reimbursement to the actual amount of collateral sources recovered by the claimant from a tortfeasor, minus its pro rata share of costs and attorney’s fees incurred by the claimant in recovering such collateral sources from the tortfeasor.
4. Liability and the Amount of Insurance Coverage Matter in Health Insurance Liens
Fourth, when more than one person is at fault for an accident, a jury must assign each party a percentage of fault. This is called comparative negligence. In these cases, sometimes the insured person is deemed partially at fault and their damages reduced. The health insurance carrier in these situations should reduce their lien to account for the fact the injured party is not receiving 100% compensation. Meaning, if the opposing party is assigned 50% fault, the lienholder must also not receive more than 50% of their lien.
Likewise, when a recovery is limited by the amount of available insurance, health insurance carriers must take into consideration what the total value of the claim would have been had there been a full recovery and should adjust their collection efforts accordingly.
Florida Statute 768.76(5) requires the court to “give consideration to any offset in the amount of settlement or judgment for any comparative negligence of the claimant, limitations in the amount of liability insurance coverage available to the tortfeasor, or any other mitigating factors which the court deems equitable and appropriate under the circumstances.”
5. The Lien Cannot Increase After the Date of Settlement or Judgment
Florida Statute 768.76(8) specifically forbids the provider from claiming a right of subrogation or reimbursement for collateral source payments made after the date of waiver, settlement, or judgment.
6. The Health Insurance Carrier Must Reply Within 30 Days to a Registered Mail Notification of Claimant’s Intent to Claim Damages or the Lien Is Waived
The process set forth by Florida Statute 768.76 is very specific so rather than summarize it the relevant portions are below.
(6) A claimant shall send the provider of any collateral sources, by certified or registered mail, notification of claimant’s intent to claim damages from the tortfeasor. If the claimant has filed suit against the tortfeasor at the time such notice is sent, a copy of the complaint against the tortfeasor should be sent along with such notice. Such notice must include a statement that the provider of collateral sources will waive any right to subrogation or reimbursement unless it provides the claimant or claimant’s attorney a statement asserting payment of benefits and right of subrogation or reimbursement within 30 days following receipt of the claimant’s notification to the collateral sources provider.
(7) Within 30 days after receipt of the claimant’s notification of intent to claim damages from the tortfeasor, the provider of collateral sources must provide the claimant or claimant’s attorney a statement asserting its payment of collateral sources benefits and right of subrogation or reimbursement. Failure of the provider of collateral sources to provide such statement to the claimant or claimant’s attorney within the 30-day period shall result in waiver of any claim to subrogation or reimbursement by the provider with respect to any such collateral sources. No right of subrogation or reimbursement shall exist for a provider of collateral sources that has waived its right of subrogation or reimbursement pursuant to this subsection.
Resolving health insurance liens can be tricky. Each case has its own facts and often the parties disagree on what law should apply. Health insurance companies sometimes claim their policies are governed by the law of another state or even federal law. Don’t pay more than you are required under your policy or the law of your claim.
Source: § 768.76, Fla. Stat. (2019).